Financial Crime World

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Financial Crime Trends in Israel 2022: A Mixed Bag of Compliance and Improvement Needed

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Israel’s efforts to combat financial crime have been met with a mixed bag of results, according to a recent report. The country received a rating of “largely compliant” (LC) on several fronts, but also fell short in others.

Risk Assessment and National Cooperation

  • Israel excelled in assessing risk and applying a risk-based approach, earning a “compliant” (C) rating.
  • However, the country struggled with national cooperation and coordination, receiving a “partially compliant” (PC) rating in this regard.

Laws and Regulations

  • Israel’s laws and regulations regarding money laundering offenses were found to be largely compliant.
  • Confiscation and provisional measures received a mixed review.
  • The country’s efforts to combat terrorist financing were commended, earning a compliant rating.

Financial Institution Secrecy and Customer Due Diligence

  • Financial institution secrecy laws were found to be partially compliant.
  • Customer due diligence and record keeping received largely compliant ratings.
  • Politically exposed persons and correspondent banking were areas where Israel fell short, receiving non-compliant (NC) ratings.

Use of New Technologies and Wire Transfers

  • The use of new technologies and wire transfers was largely compliant.
  • Reliance on third parties and internal controls at foreign branches and subsidiaries require improvement.

Transparency and Beneficial Ownership

  • Transparency and beneficial ownership of legal persons and arrangements were areas where Israel excelled, earning compliant ratings.

Regulation and Supervision

  • Regulation and supervision of financial institutions and powers of supervisors were found to be largely compliant.
  • However, regulation and supervision of designated non-financial businesses and professions (DNFBPs) and DNFBPs’ customer due diligence measures require improvement.

Financial Intelligence Units and Law Enforcement

  • Financial intelligence units and law enforcement and investigative authorities also received partially compliant ratings.

Cash Couriers, Statistics, Guidance, and Feedback

  • Cash couriers, statistics, guidance, and feedback all received compliant ratings.

Sanctions and International Instruments

  • Sanctions and international instruments were found to be largely compliant.
  • Mutual legal assistance, extradition, and other forms of international cooperation all received mixed reviews.

Conclusion

Overall, Israel’s efforts to combat financial crime are a mixed bag, with some areas requiring significant improvement. The country must continue to work towards strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) regime if it is to effectively prevent and detect financial crimes.